DTC Agreement Between Japan and New Zealand

CONVENTION BETWEEN
JAPAN AND NEW ZEALAND

FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
Japan and New Zealand,

Desiring to conclude a new Convention for the
avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income,
Have agreed as follows:
Article 1
PERSONS COVERED
This Convention shall apply to persons who are
residents of one or both of the Contracting States.
Article 2
TAXES COVERED
1.
The taxes to which this Convention shall apply are:

(a)
in the case of Japan:

(i)
(ii)
(iii)
(iv)
the income tax;

the corporation tax;
the special income tax for reconstruction;
and
the special corporation tax for
reconstruction;
(hereinafter referred to as Japanese tax); and

(b)
in the case of New Zealand:

the income tax
(hereinafter referred to as New Zealand tax).
2.
This Convention shall apply also to any identical or
substantially similar taxes that are imposed after the date
of signature of the Convention in addition to, or in place
of, those referred to in paragraph 1. The competent
authorities of the Contracting States shall notify each
other of any significant changes that have been made in
their respective taxation laws, within a reasonable period
of time after such changes.
Article 3
GENERAL DEFINITIONS
1.
For the purposes of this Convention, unless the
context otherwise requires:
(a)
the term Japan, when used in a geographical

sense, means all the territory of Japan,
including its territorial sea, in which the laws
relating to Japanese tax are in force, and all
the area beyond its territorial sea, including
the seabed and subsoil thereof, over which Japan
has sovereign rights in accordance with
international law and in which the laws relating
to Japanese tax are in force;
(b)
the term New Zealand means the territory of New

Zealand but does not include Tokelau; it also
includes any area beyond the territorial sea
designated under New Zealand legislation and in
accordance with international law as an area in
which New Zealand may exercise sovereign rights
with respect to natural resources;
(c)
the terms a Contracting State and the other

Contracting State mean Japan or New Zealand, as
the context requires;
(d)
the term tax means Japanese tax or New Zealand

tax, as the context requires;
(e)
the term person includes an individual, a

company and any other body of persons;
(f)
the term company means any body corporate or

any entity that is treated as a body corporate
for tax purposes;
(g)
the term enterprise applies to the carrying on

of any business;
(h)
the terms enterprise of a Contracting State and

enterprise of the other Contracting State mean
respectively an enterprise carried on by a
resident of a Contracting State and an enterprise
carried on by a resident of the other Contracting
State;
(i)
the term international traffic means any

transport by a ship or aircraft operated by an
enterprise of a Contracting State, except when
the ship or aircraft is operated solely between
places in the other Contracting State;
(j)
the term national, in relation to a Contracting

State, means:
(k)
(i)
any individual possessing the nationality or

citizenship of that Contracting State; and
(ii)
any legal person, partnership or association

deriving its status as such from the laws in
force in that Contracting State;
the term competent authority means:

(i)
(ii)
(l)
in the case of Japan, the Minister of

Finance or an authorised representative of
the Minister of Finance; and
in the case of New Zealand, the Commissioner
of Inland Revenue or an authorised
representative of the Commissioner of Inland
Revenue; and
the term business includes the performance of

professional services and of other activities of
an independent character.
2.
As regards the application of this Convention at any
time by a Contracting State, any term not defined therein
shall, unless the context otherwise requires, have the
meaning that it has at that time under the laws of that
Contracting State for the purposes of the taxes to which
the Convention applies, any meaning under the applicable
tax laws of that Contracting State prevailing over a
meaning given to the term under other laws of that
Contracting State.
Article 4
RESIDENT
1.
For the purposes of this Convention, the term
resident of a Contracting State means:
(a)
in the case of Japan, any person who, under the

laws of Japan, is liable to tax therein by reason
of that persons domicile, residence, place of
head or main office or any other criterion of a
similar nature; and
(b)
in the case of New Zealand, any person who, under

the laws of New Zealand, is liable to tax as a
resident of New Zealand.
The Government of a Contracting State or a political

subdivision or local authority thereof is also a resident
of that Contracting State for the purposes of the
Convention. A person is not a resident of a Contracting
State for the purposes of the Convention if the person is
liable to tax in that Contracting State in respect only of
income from sources in that Contracting State.
2.
Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then
the individuals status shall be determined as follows:
(a)
the individual shall be deemed to be a resident

only of the Contracting State in which a
permanent home is available to the individual; if
a permanent home is available to the individual
in both Contracting States, the individual shall
be deemed to be a resident only of the
Contracting State with which the individuals
personal and economic relations are closer
(centre of vital interests);
(b)
if the Contracting State in which the

individuals centre of vital interests is
situated cannot be determined, or if a permanent
home is not available to the individual in either
Contracting State, the individual shall be deemed
to be a resident only of the Contracting State in
which the individual has an habitual abode;
(c)
if the individual has an habitual abode in both

Contracting States or in neither of them, the
individual shall be deemed to be a resident only
of the Contracting State of which the individual
is a national;
(d)
if the individual is a national of both

Contracting States or of neither of them, the
competent authorities of the Contracting States
shall settle the question by mutual agreement.
3.
Where by reason of the provisions of paragraph 1 a
person other than an individual is a resident of both
Contracting States, then the competent authorities of the
Contracting States shall endeavour to determine by mutual
agreement the Contracting State of which that person shall
be deemed to be a resident for the purposes of this
Convention, having regard to the place of its head or main
office, its place of effective management and any other
relevant factors. In the absence of a mutual agreement by
the competent authorities of the Contracting States, the
person shall not be considered a resident of either
Contracting State for the purposes of its claiming any
benefits provided by the Convention, except those provided
by Article 25.
4.
(a)
Where under this Convention any income is

relieved from tax in a Contracting State and,
under the laws in force in the other Contracting
State, an individual, in respect of that income,
is taxed by reference to the amount thereof that
is remitted to or received in that other
Contracting State and not by reference to the
full amount thereof, then the relief to be
allowed under the Convention in the firstmentioned Contracting State shall apply only to
so much of that income as is taxed in the other
Contracting State.
(b)
Where under this Convention any income is

relieved from tax in a Contracting State and,
under the laws in force in the other Contracting
State, an individual, in respect of that income,
is exempt from tax by virtue of being a temporary
resident of that other Contracting State within
the meaning of the applicable law of that other
Contracting State, then the relief to be allowed
under the Convention in the first-mentioned
Contracting State shall not apply to the extent
that that income is exempt from tax in the other
Contracting State.
5.
For the purposes of applying this Convention:

(a)
an item of income:
(i)
(ii)
derived from a Contracting State through an

entity that is organised in the other
Contracting State; and
treated as the income of the beneficiaries,
members or participants of that entity under
the tax law of that other Contracting State,
shall be eligible for the benefits of the

Convention that would be granted if it were
directly derived by a beneficiary, member or
participant of that entity who is a resident of
that other Contracting State, to the extent that
such beneficiaries, members or participants are
residents of that other Contracting State and
satisfy any other conditions specified in the
Convention, without regard to whether the income
is treated as the income of such beneficiaries,
members or participants under the tax law of the
first-mentioned Contracting State.
(b)
an item of income:
(i)
(ii)

entity that is organised in the other
treated as the income of that entity under
the tax law of that other Contracting State,

Convention that would be granted to a resident of
that other Contracting State, without regard to
whether the income is treated as the income of
the entity under the tax law of the firstmentioned Contracting State, if such entity is a
resident of that other Contracting State and
satisfies any other conditions specified in the
Convention.
(c)
an item of income:
(i)

entity that is organised in a state other
than the Contracting States; and
(ii)
treated as the income of the beneficiaries,

members or participants of that entity under
the tax law of the other Contracting State,

Convention that would be granted if it were
directly derived by a beneficiary, member or
participant of that entity who is a resident of
that other Contracting State, to the extent that
such beneficiaries, members or participants are
residents of that other Contracting State and
satisfy any other conditions specified in the
Convention, without regard to whether the income
is treated as the income of such beneficiaries,
members or participants under the tax law of the
first-mentioned Contracting State or the state
where the entity is organised.
(d)
an item of income:
(i)

entity that is organised in a state other
than the Contracting States; and
(ii)

shall not be eligible for the benefits of the

Convention.
(e)
an item of income:
(i)
(ii)

entity that is organised in that Contracting
State; and
shall not be eligible for the benefits of the

Convention.
Article 5
PERMANENT ESTABLISHMENT
1.
For the purposes of this Convention, the term
permanent establishment means a fixed place of business
through which the business of an enterprise is wholly or
partly carried on.
2.
The term permanent establishment includes
especially:
(a)
a place of management;
(b)
a branch;
(c)
an office;
(d)
a factory;
(e)
a workshop; and
(f)
a mine, an oil or gas well, a quarry or any other

place of extraction of natural resources.
3.
A building site or construction or installation
project constitutes a permanent establishment only if it
lasts more than twelve months.
4.
Notwithstanding the provisions of paragraphs 1, 2 and
3, an enterprise shall be deemed to have a permanent
establishment in a Contracting State and to carry on
business through that permanent establishment if, for a
period or periods exceeding in the aggregate 90 days in any
twelve month period, it carries on activities (including
the operation of substantial equipment) in that Contracting
State which consist of, or which are connected with, the
exploration for or the exploitation of natural resources,
including standing timber, situated in that Contracting
State.
5.
Notwithstanding the provisions of paragraphs 1, 2 and
3, where an enterprise of a Contracting State performs
services in the other Contracting State:
(a)
through an individual who is present in that

other Contracting State for a period or periods
exceeding in the aggregate 183 days in any twelve
month period, and more than 50 per cent of the
gross revenues attributable to active business
activities of the enterprise during this period
or periods are derived from the services
performed in that other Contracting State through
that individual, or
(b)
for a period or periods exceeding in the

aggregate 183 days in any twelve month period,
and these services are performed for the same
project or for connected projects through one or
more individuals who are present and performing
such services in that other Contracting State,
the activities carried on in that other Contracting State

in performing these services shall be deemed to be carried
on through a permanent establishment of the enterprise
situated in that other Contracting State, unless these
services are limited to those mentioned in paragraph 7
which, if performed through a fixed place of business,
would not make the fixed place of business a permanent
establishment under the provisions of that paragraph. For
the purposes of this paragraph, services performed by an
individual on behalf of one enterprise shall not be
considered to be performed by another enterprise through
that individual unless that other enterprise supervises,
directs or controls the manner in which these services are
performed by the individual.
6.
(a)
The duration of activities under paragraphs 3, 4

and 5 shall be determined by aggregating the
periods during which activities are carried on in
a Contracting State by associated enterprises
provided that the activities carried on in that
Contracting State by an enterprise are connected
with the activities carried on in that
Contracting State by its associated enterprise.
(b)
The period during which two or more associated

enterprises are carrying on concurrent activities
shall be counted only once for the purpose of
determining the duration of activities.
(c)
For the purposes of this Article, an enterprise

shall be deemed to be associated with another
enterprise if:
(i)
an enterprise participates directly or

indirectly in the management, control or
capital of the other enterprise; or
(ii)
the same persons participate directly or

indirectly in the management, control or
capital of the enterprises.
7.
Notwithstanding the preceding provisions of this
Article, the term permanent establishment shall be deemed
not to include:
(a)
the use of facilities solely for the purpose of

storage, display or delivery of goods or
merchandise belonging to the enterprise;
(b)
the maintenance of a stock of goods or

merchandise belonging to the enterprise solely
for the purpose of storage, display or delivery;
(c)
the maintenance of a stock of goods or

merchandise belonging to the enterprise solely
for the purpose of processing by another
enterprise;
(d)
the maintenance of a fixed place of business

solely for the purpose of purchasing goods or
merchandise or of collecting information, for the
enterprise;
(e)

solely for the purpose of carrying on, for the
enterprise, any other activity of a preparatory
or auxiliary character;
(f)

solely for any combination of activities
mentioned in subparagraphs (a) to (e), provided
that the overall activity of the fixed place of
business resulting from this combination is of a
preparatory or auxiliary character.
8.
Notwithstanding the provisions of paragraphs 1 and 2,
where a person other than an agent of an independent
status to whom the provisions of paragraph 9 apply is
acting on behalf of an enterprise and:
(a)
has, and habitually exercises, in a Contracting

State an authority to conclude contracts in the
name of the enterprise; or
(b)
manufactures or processes in a Contracting State

for the enterprise goods or merchandise belonging
to the enterprise which participates in the
management, control or capital of the person, and
any of those goods or merchandise are sold to a
resident of that Contracting State,
that enterprise shall be deemed to have a permanent

establishment in that Contracting State in respect of any
activities which that person undertakes for the enterprise,
unless the activities of such person are limited to those
mentioned in paragraph 7 which, if exercised through a
fixed place of business, would not make this fixed place of
business a permanent establishment under the provisions of
that paragraph.
9.
An enterprise shall not be deemed to have a permanent
establishment in a Contracting State merely because it
carries on business in that Contracting State through a
broker, general commission agent or any other agent of an
independent status, provided that such persons are acting
in the ordinary course of their business.
10. The fact that a company which is a resident of a
Contracting State controls or is controlled by a company
which is a resident of the other Contracting State, or
which carries on business in that other Contracting State
(whether through a permanent establishment or otherwise),
shall not of itself constitute either company a permanent
establishment of the other.
Article 6
INCOME FROM IMMOVABLE PROPERTY
1.
Income derived by a resident of a Contracting State
from immovable property (including income from agriculture,
forestry or fishing) situated in the other Contracting
State may be taxed in that other Contracting State.
2.
The term immovable property shall have the meaning
which it has under the law of the Contracting State in
which the property in question is situated. The term shall
in any case include property accessory to immovable
property, livestock and equipment used in agriculture and
forestry, rights to which the provisions of general law
respecting immovable property apply, usufruct of immovable
property, rights to explore for or exploit natural
resources or standing timber, and rights to variable or
fixed payments either as consideration for or in respect of
the exploration for or the exploitation of, or the right to
explore for or exploit, natural resources or standing
timber; ships and aircraft shall not be regarded as
immovable property.
3.
The provisions of paragraph 1 shall apply to income
derived from the direct use, letting, or use in any other
form of immovable property.
4.
The provisions of paragraphs 1 and 3 shall also apply
to the income from immovable property of an enterprise.
5.
Any right referred to in paragraph 2 shall be regarded
as situated where the property to which it relates is
situated or where the exploration or exploitation may take
place.
Article 7
BUSINESS PROFITS
1.
The profits of an enterprise of a Contracting State
shall be taxable only in that Contracting State unless the
enterprise carries on business in the other Contracting
State through a permanent establishment situated therein.
If the enterprise carries on business as aforesaid, the
profits of the enterprise may be taxed in that other
Contracting State but only so much of them as is
attributable to that permanent establishment.
2.
Subject to the provisions of paragraph 3, where an
enterprise of a Contracting State carries on business in
the other Contracting State through a permanent
establishment situated therein, there shall in each
Contracting State be attributed to that permanent
establishment the profits which it might be expected to
make if it were a distinct and separate enterprise engaged
in the same or similar activities under the same or similar
conditions and dealing wholly independently with the
enterprise of which it is a permanent establishment.
3.
In determining the profits of a permanent
establishment, there shall be allowed as deductions
expenses which are incurred for the purposes of the
permanent establishment, including executive and general
administrative expenses so incurred, whether in the
Contracting State in which the permanent establishment is
situated or elsewhere.
4.
No profits shall be attributed to a permanent
establishment by reason of the mere purchase by that
permanent establishment of goods or merchandise for the
enterprise.
5.
For the purposes of the preceding paragraphs of this
Article, the profits to be attributed to the permanent
establishment shall be determined by the same method year
by year unless there is good and sufficient reason to the
contrary.
6.
Where:
(a)
a resident of a Contracting State is beneficially

entitled, whether directly or through one or more
interposed trusts, to a share of the profits
derived from business carried on in the other
Contracting State by the trustee of a trust
(other than a trust which is treated as a company
for tax purposes) in its capacity as trustee; and
(b)
in relation to the carrying on of the business,

that trustee, in accordance with the principles
stated in Article 5, has a permanent
establishment in that other Contracting State,
the business carried on by the trustee shall be deemed to

be a business carried on in that other Contracting State by
that resident through a permanent establishment situated
therein and the share of the profits shall be attributed to
that permanent establishment.
7.
Where profits include items of income which are dealt
with separately in other Articles of this Convention, then
the provisions of those Articles shall not be affected by
the provisions of this Article.
8.
Notwithstanding the other provisions of this Article,
an enterprise of a Contracting State that derives income
from any form of insurance, other than life insurance, in
the form of premiums paid for the insurance of risks
situated in that other Contracting State, may be taxed on
such income in the other Contracting State in accordance
with the laws of that other Contracting State which are in
force on the date of signature of this Convention, or are
substantially similar in general principle to any such
provision but are enacted and have effect after the date of
signature of the Convention.
Article 8
SHIPPING AND AIR TRANSPORT
1.
Profits from the operation of ships or aircraft in
international traffic carried on by an enterprise of a
Contracting State shall be taxable only in that Contracting
State.
2.
Notwithstanding the provisions of Article 2, provided
that no political subdivision or local authority of New
Zealand levies a tax similar to the local inhabitant taxes
or the enterprise tax in Japan in respect of the operation
of ships or aircraft in international traffic carried on by
an enterprise of Japan, an enterprise of New Zealand shall
be exempt from the local inhabitant taxes and the
enterprise tax in Japan in respect of the operation of
ships or aircraft in international traffic.
3.
Notwithstanding the provisions of paragraph 1, profits
referred to in that paragraph which are derived by an
enterprise of a Contracting State from carriage by ship or
aircraft of passengers, livestock, mail, goods or
merchandise which are shipped or embarked in the other
Contracting State and are discharged at a place in that
other Contracting State may be taxed in that other
Contracting State.
4.
The provisions of paragraphs 1, 2 and 3 shall also
apply to profits from the participation in a pool, a joint
business or an international operating agency.
Article 9
ASSOCIATED ENTERPRISES
1.
Where
(a)
an enterprise of a Contracting State participates

directly or indirectly in the management, control
or capital of an enterprise of the other
Contracting State, or
(b)
the same persons participate directly or

indirectly in the management, control or capital
of an enterprise of a Contracting State and an
enterprise of the other Contracting State,
and in either case conditions are made or imposed between

the two enterprises in their commercial or financial
relations which differ from those which would be made
between independent enterprises, then any profits which
would, but for those conditions, have accrued to one of the
enterprises, but, by reason of those conditions, have not
so accrued, may be included in the profits of that
enterprise and taxed accordingly.
2.
Where a Contracting State includes in the profits of
an enterprise of that Contracting State - and taxes
accordingly - profits on which an enterprise of the other
Contracting State has been charged to tax in that other
Contracting State and the profits so included are profits
which would have accrued to the enterprise of the firstmentioned Contracting State if the conditions made between
the two enterprises had been those which would have been
made between independent enterprises, then that other
Contracting State shall make an appropriate adjustment to
the amount of the tax charged therein on those profits. In
determining such adjustment, due regard shall be had to the
other provisions of this Convention and the competent
authorities of the Contracting States shall if necessary
consult each other.
3.
Notwithstanding the provisions of paragraph 1, a
Contracting State shall not change the profits of an
enterprise of that Contracting State in the circumstances
referred to in that paragraph after ten years from the end
of the taxable year in which the profits that would be
subjected to such change would, but for the conditions
referred to in that paragraph, have accrued to that
enterprise. The provisions of this paragraph shall not
apply in the case of fraud or wilful default.
Article 10
DIVIDENDS
1.
Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting
State may be taxed in that other Contracting State.
2.
However, such dividends may also be taxed in the
Contracting State of which the company paying the dividends
is a resident and according to the laws of that Contracting
State, but if the beneficial owner of the dividends is a
resident of the other Contracting State, the tax so charged
shall not exceed 15 per cent of the gross amount of the
dividends.
3.
Notwithstanding the provisions of paragraph 2,
dividends shall not be taxed in the Contracting State of
which the company paying the dividends is a resident if the
beneficial owner of the dividends is a resident of the
other Contracting State and is a company that has owned
directly or indirectly, for the period of six months ending
on the date on which entitlement to the dividends is
determined, at least 10 per cent of the voting power of the
company paying the dividends and the company that is the
beneficial owner of the dividends:
(a)
is a qualified person by reason of the provisions

of subparagraph (c) of paragraph 2 of Article 22;
(b)
has at least 50 per cent of its voting power in

the aggregate owned directly or indirectly by
five or fewer companies referred to in
subparagraph (a); or
(c)
is granted benefits with respect to those

dividends under paragraph 5 of Article 22.
4.
The provisions of paragraphs 2 and 3 shall not affect
the taxation of the company in respect of the profits out
of which the dividends are paid.
5.
The provisions of paragraph 3 shall not apply in the
case of dividends paid by a company which is entitled to a
deduction for dividends paid to its beneficiaries in
computing its taxable income in the Contracting State of
which the company is a resident.
6.
The term dividends as used in this Article means
income from shares or other rights, not being debt-claims,
participating in profits, as well as income which is
subjected to the same taxation treatment as income from
shares by the tax laws of the Contracting State of which
the company making the distribution is a resident.
7.
The provisions of paragraphs 1, 2 and 3 shall not
apply if the beneficial owner of the dividends, being a
resident of a Contracting State, carries on business in the
other Contracting State of which the company paying the
dividends is a resident through a permanent establishment
situated therein and the holding in respect of which the
dividends are paid is effectively connected with such
permanent establishment. In such case the provisions of
Article 7 shall apply.
8.
Where a company which is a resident of a Contracting
State derives profits or income from the other Contracting
State, that other Contracting State may not impose any tax
on the dividends paid by the company, except insofar as
such dividends are paid to a resident of that other
Contracting State or insofar as the holding in respect of
which the dividends are paid is effectively connected with
a permanent establishment situated in that other
Contracting State, nor subject the companys undistributed
profits to a tax on the companys undistributed profits,
even if the dividends paid or the undistributed profits
consist wholly or partly of profits or income arising in
such other Contracting State.
Article 11
INTEREST
1.
Interest arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in
that other Contracting State.
2.
However, such interest may also be taxed in the
Contracting State in which it arises and according to the
laws of that Contracting State, but if the beneficial owner
of the interest is a resident of the other Contracting
State, the tax so charged shall not exceed 10 per cent of
the gross amount of the interest.
3.
interest arising in a Contracting State shall be taxable
only in the other Contracting State if:
(a)
the interest is beneficially owned by the

Government of that other Contracting State, a
political subdivision or local authority thereof,
or the central bank of that other Contracting
State or any institution wholly owned by that
Government;
(b)
the interest is beneficially owned by a resident

of that other Contracting State with respect to
debt-claims guaranteed, insured or indirectly
financed by the Government of that other
Contracting State, a political subdivision or
local authority thereof, or the central bank of
that other Contracting State or any institution
wholly owned by that Government; or
(c)
the interest is beneficially owned by a resident

of the other Contracting State that is a
financial institution that is unrelated to and
dealing wholly independently with the payer. For
the purposes of this Article, the term financial
institution means a bank or other enterprise
substantially deriving its profits by raising
debt finance in the financial markets or by
taking deposits at interest and using those funds
in carrying on a business of providing finance.
4.
For the purposes of paragraph 3, the terms the
central bank and institution wholly owned by that
Government mean:
(a)

(i)
(ii)
the Bank of Japan;

the Japan Bank for International
Cooperation;
(iii)
the Japan International Cooperation Agency;

and
(iv)
the Nippon Export and Investment Insurance;
(b)

the Reserve Bank of New Zealand;
(c) such other similar institution the capital of

which is wholly owned by the Government of a
Contracting State as may be agreed upon from time
to time between the Governments of the Contracting
States through an exchange of diplomatic notes.
5.
Notwithstanding paragraph 3, interest referred to in
subparagraph (c) of that paragraph may be taxed in the
Contracting State in which it arises at a rate not
exceeding 10 per cent of the gross amount of the interest
if:
(a)
in the case of interest arising in New Zealand,

it is paid by a person that has not paid approved
issuer levy in respect of the interest. This
subparagraph (a) shall not apply if New Zealand
does not have an approved issuer levy, or the
payer of the interest is not eligible to elect to
pay the approved issuer levy, or if the rate of
the approved issuer levy payable in respect of
such interest exceeds two percent of the gross
amount of the interest. For the purposes of this
Article, approved issuer levy includes any
identical or substantially similar charge payable
by the payer of interest arising in New Zealand
enacted after the date of signature of this
Convention in place of approved issuer levy; or
(b)
it is paid as part of an arrangement involving

back-to-back loans or other arrangement that is
economically equivalent and intended to have a
similar effect to an arrangement involving backto-back loans.
6.
The term interest as used in this Article means
income from debt-claims of every kind, whether or not
secured by mortgage and whether or not carrying a right to
participate in the debtors profits, and in particular,
income from government securities and income from bonds or
debentures, including premiums and prizes attaching to such
securities, bonds or debentures, and all other income that
is subjected to the same taxation treatment as income from
money lent by the tax laws of the Contracting State in
which the income arises. Income dealt with in Article 10
shall not be regarded as interest for the purposes of this
Convention.
7.
The provisions of paragraphs 1, 2 and 3 shall not
apply if the beneficial owner of the interest, being a
resident of a Contracting State, carries on business in the
other Contracting State in which the interest arises
through a permanent establishment situated therein and the
debt-claim in respect of which the interest is paid is
effectively connected with such permanent establishment.
In such case the provisions of Article 7 shall apply.
8.
Interest shall be deemed to arise in a Contracting
State when the payer is a resident of that Contracting
State. Where, however, the person paying the interest,
whether the person is a resident of a Contracting State or
not, has in a Contracting State a permanent establishment
in connection with which the indebtedness on which the
interest is paid was incurred, and such interest is borne
by such permanent establishment, then such interest shall
be deemed to arise in the Contracting State in which the
permanent establishment is situated.
9.
Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and
some other person, the amount of the interest, having
regard to the debt-claim for which it is paid, exceeds the
amount which would have been agreed upon by the payer and
the beneficial owner in the absence of such relationship,
the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of
the payments shall remain taxable according to the laws of
each Contracting State, due regard being had to the other
provisions of this Convention.
Article 12
ROYALTIES
1.
Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in
2.
However, such royalties may also be taxed in the
Contracting State in which they arise, and according to the
laws of that Contracting State, but if the beneficial owner
of the royalties is a resident of the other Contracting
State, the tax so charged shall not exceed 5 per cent of
the gross amount of the royalties.
3.
The term royalties as used in this Article means
payments of any kind received as a consideration for:
(a)
the use of, or the right to use, any copyright,

patent, design or model, plan, secret formula or
process, trademark or other like property or
right;
(b)
the supply of scientific, technical, industrial

or commercial knowledge or information;
(c)
the supply of any assistance that is ancillary

and subsidiary to, and is furnished as a means of
enabling the application or enjoyment of, any
such property or right as is mentioned in
subparagraph (a) or any such knowledge or
information as is mentioned in subparagraph (b);
or
(d)
total or partial forbearance in respect of the

use or supply of any property or right referred
to in this paragraph.
4.
The provisions of paragraphs 1 and 2 shall not apply
if the beneficial owner of the royalties, being a resident
of a Contracting State, carries on business in the other
Contracting State in which the royalties arise through a
permanent establishment situated therein and the right or
property in respect of which the royalties are paid is
5.
Royalties shall be deemed to arise in a Contracting
State when the payer is a resident of that Contracting
State. Where, however, the person paying the royalties,
whether the person is a resident of a Contracting State or
not, has in a Contracting State a permanent establishment
in connection with which the liability to pay the royalties
was incurred, and the royalties are borne by such permanent
establishment, then the royalties shall be deemed to arise
in the Contracting State in which the permanent
establishment is situated.
6.
Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and
some other person, the amount of the royalties, having
regard to what they are paid for, exceeds the amount which
would have been agreed upon by the payer and the beneficial
owner in the absence of such relationship, the provisions
of this Article shall apply only to the last-mentioned
amount. In such case, the excess part of the payments
shall remain taxable according to the laws of each
Contracting State, due regard being had to the other
provisions of this Convention.
Article 13
ALIENATION OF PROPERTY
1.
Income, profits or gains derived by a resident of a
Contracting State from the alienation of immovable property
referred to in Article 6 and situated in the other
Contracting State may be taxed in that other Contracting
State.
2.
Income, profits or gains derived by a resident of a
Contracting State from the alienation of shares or
interests in a company, partnership or trust deriving at
least 50 per cent of the value of its property directly or
indirectly from immovable property referred to in Article 6
and situated in the other Contracting State may be taxed in
that other Contracting State, unless the relevant class of
the shares or the interests is traded on a recognised stock
exchange specified in subparagraph (c) of paragraph 6 of
Article 22 and the resident and persons related or
connected to that resident own in the aggregate 5 per cent
or less of that class of the shares or the interests.
3.
Where
(a)
the Government of Japan (including the Deposit

Insurance Corporation of Japan) provides,
pursuant to the laws of Japan concerning failure
resolution involving imminent insolvency of
financial institutions, substantial financial
assistance to a financial institution that is a
resident of Japan; and
(b)
a resident of New Zealand acquires shares in the

financial institution from the Government of
Japan,
gains derived by the resident of New Zealand from the

alienation of such shares may be taxed in Japan, provided
that the alienation is made within five years from the
first date on which such financial assistance was provided.
4.
Income, profits or gains from the alienation of any
property, other than immovable property, forming part of
the business property of a permanent establishment which an
enterprise of a Contracting State has in the other
Contracting State, including such income, profits or gains
from the alienation of such a permanent establishment
(alone or with the whole enterprise), may be taxed in that
other Contracting State.
5.
Income, profits or gains derived by an enterprise of a
Contracting State from the alienation of ships or aircraft
operated by that enterprise in international traffic, or
any property, other than immovable property, pertaining to
the operation of such ships or aircraft shall be taxable
only in that Contracting State.
6.
Income, profit or gains from the alienation of any
property other than that referred to in the preceding
paragraphs of this Article shall be taxable only in the
Contracting State of which the alienator is a resident.
Article 14
INCOME FROM EMPLOYMENT
1.
Subject to the provisions of Articles 15, 17 and 18,
salaries, wages and other similar remuneration derived by a
resident of a Contracting State in respect of an employment
shall be taxable only in that Contracting State unless the
employment is exercised in the other Contracting State. If
the employment is so exercised, such remuneration as is
derived therefrom may be taxed in that other Contracting
State.
2.
remuneration derived by a resident of a Contracting State
in respect of an employment exercised in the other
Contracting State shall be taxable only in the firstmentioned Contracting State if:
(a)
the recipient is present in that other

Contracting State for a period or periods not
exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the taxable
year concerned, and
(b)
the remuneration is paid by, or on behalf of, an

employer who is not a resident of that other
Contracting State, and
(c)
the remuneration is not borne by a permanent

establishment which the employer has in that
other Contracting State.
3.
Notwithstanding the preceding provisions of this
Article, remuneration derived in respect of an employment
exercised aboard a ship or aircraft operated in
international traffic by an enterprise of a Contracting
State may be taxed in that Contracting State.
Article 15
DIRECTORS FEES
Directors fees and other similar payments derived by
a resident of a Contracting State in that persons capacity
as a member of the board of directors of a company which is
a resident of the other Contracting State may be taxed in
Article 16
ENTERTAINERS AND SPORTSPERSONS
1.
Notwithstanding the provisions of Articles 7 and 14,
income derived by a resident of a Contracting State as an
entertainer, such as a theatre, motion picture, radio or
television artiste, or a musician, or as a sportsperson,
from that persons personal activities as such exercised in
the other Contracting State, may be taxed in that other
Contracting State.
2.
Where income in respect of personal activities
exercised by an entertainer or a sportsperson in that
persons capacity as such accrues not to the entertainer or
sportsperson but to another person, that income may,
notwithstanding the provisions of Articles 7 and 14, be
taxed in the Contracting State in which the activities of
the entertainer or sportsperson are exercised.
Article 17
PENSIONS
Subject to the provisions of paragraph 2 of Article
18, pensions and other similar remuneration, including
payments under the social security legislation of a
Contracting State, paid to a resident of a Contracting
State shall be taxable only in that Contracting State.
Article 18
GOVERNMENT SERVICE
1.
(a)
Salaries, wages and other similar remuneration

paid by a Contracting State or a political
subdivision or local authority thereof to an
individual in respect of services rendered to
that Contracting State or political subdivision
or local authority shall be taxable only in that
Contracting State.
(b)
However, such salaries, wages and other similar

remuneration shall be taxable only in the other
Contracting State if the services are rendered in
that other Contracting State and the individual
is a resident of that other Contracting State
who:
(i)
(ii)
2.
is a national of that other Contracting

State; or
did not become a resident of that other
Contracting State solely for the purpose of
rendering the services.
(a)

pensions and other similar remuneration paid by,
or out of funds to which contributions are made
or created by, a Contracting State or a political
subdivision or local authority thereof to an
individual in respect of services rendered to
that Contracting State or political subdivision
or local authority shall be taxable only in that
Contracting State.
(b)
However, such pensions and other similar

remuneration shall be taxable only in the other
Contracting State if the individual is a resident
of, and a national of, that other Contracting
State.
3.
The provisions of Articles 14, 15, 16 and 17 shall
apply to salaries, wages, pensions, and other similar
remuneration in respect of services rendered in connection
with a business carried on by a Contracting State or a
political subdivision or local authority thereof.
Article 19
STUDENTS
Payments which a student or business apprentice who is
or was immediately before visiting a Contracting State a
resident of the other Contracting State and who is present
in the first-mentioned Contracting State solely for the
purpose of that persons education or training receives for
the purpose of that persons maintenance, education or
training shall not be taxed in the first-mentioned
Contracting State, provided that such payments arise from
sources outside the first-mentioned Contracting State. The
exemption provided by this Article shall apply to a
business apprentice only for a period not exceeding one
year from the date on which the person first begins that
persons training in the first-mentioned Contracting State.
Article 20
SILENT PARTNERSHIP
Notwithstanding any other provisions of this
Convention, any income and gains derived by a silent
partner in respect of a silent partnership (Tokumei Kumiai)
contract or other similar contract may be taxed in the
Contracting State in which such income and gains arise and
according to the laws of that Contracting State.
Article 21
OTHER INCOME
1.
Items of income of a resident of a Contracting State,
wherever arising, not dealt with in the foregoing Articles
of this Convention shall be taxable only in that
Contracting State.
2.
The provisions of paragraph 1 shall not apply to
income, other than income from immovable property as
defined in paragraph 2 of Article 6, if the recipient of
such income, being a resident of a Contracting State,
carries on business in the other Contracting State through
a permanent establishment situated therein and the right or
property in respect of which the income is paid is
3.
items of income of a resident of a Contracting State not
dealt with in the foregoing Articles of this Convention and
arising in the other Contracting State may also be taxed in
Article 22
LIMITATION ON BENEFITS
1.
Except as otherwise provided in this Article, a
resident of a Contracting State that derives income
described in paragraph 3 of Article 11 or Article 13 from
the other Contracting State shall be entitled to the
benefits granted for a taxable year by the provisions of
those paragraphs or Articles only if such resident is a
qualified person as defined in paragraph 2 and satisfies
any other specified conditions in those paragraphs or
Articles for the obtaining of such benefits.
2.
A resident of a Contracting State is a qualified
person for a taxable year only if such resident is either:
(a)
an individual;
(b)
a qualified governmental entity;
(c)
a company, if its principal class of shares is

listed or registered on a recognised stock
exchange specified in clause (i) or (ii) of
subparagraph (c) of paragraph 6 and is regularly
traded on one or more recognised stock exchanges;
(d)
a pension fund, provided that as of the end of

the prior taxable year more than 50 per cent of
its beneficiaries, members or participants are
individuals who are residents of either
Contracting State;
(e)
an organisation established under the law of that

Contracting State and operated exclusively for a
religious, charitable, educational, scientific,
artistic, cultural or public purposes, provided
that all or part of its income may be exempt from
tax under the domestic law of that Contracting
State; or
(f)
a person other than an individual, if residents

of either Contracting State that are qualified
persons by reason of subparagraph (a), (b), (c),
(d) or (e) of this paragraph own, directly or
indirectly, at least 50 per cent of the voting
power or other beneficial interests of the
person.
3.
Where the provisions of subparagraph (f) of
paragraph 2 apply:
(a)
in respect of taxation by withholding at source,

a resident of a Contracting State shall be
considered to satisfy the conditions described in
that subparagraph for the taxable year in which
payment of an item of income is made if such
resident satisfies those conditions during the
twelve month period preceding the date of the
payment;
(b)
in all other cases, a resident of a Contracting

State shall be considered to satisfy the
conditions described in that subparagraph for a
taxable year if such resident satisfies those
conditions on at least half the days of the
taxable year.
4.
(a)
Notwithstanding that a resident of a Contracting

State may not be a qualified person, that
resident shall be entitled to the benefits
granted by the provisions of paragraph 3 of
Article 11 or Article 13 with respect to an item
of income described in those paragraphs or
Articles derived from the other Contracting State
if:
(i)
(ii)
(iii)
(b)
the resident is carrying on business in the

first-mentioned Contracting State (other
than the business of making or managing
investments for the residents own account,
unless the business is banking, insurance or
securities business carried on by a bank,
insurance company or securities dealer);
the income derived from that other
Contracting State is derived in connection
with, or is incidental to, that business;
and
that resident satisfies any other specified
conditions in those paragraphs or Articles
for the obtaining of such benefits.
If a resident of a Contracting State derives an

item of income from a business carried on by that
resident in the other Contracting State or
derives an item of income arising in the other
Contracting State from a person that has with the
resident a relationship described in subparagraph
(a) or (b) of paragraph 1 of Article 9, the
conditions described in subparagraph (a) of this
paragraph shall be considered to be satisfied
with respect to such item of income only if the
business carried on in the first-mentioned
Contracting State is substantial in relation to
the business carried on in that other Contracting
State. Whether such business is substantial for
the purpose of this paragraph shall be determined
on the basis of all the facts and circumstances.
(c)
In determining whether a person is carrying on

business in a Contracting State under
subparagraph (a) of this paragraph, the business
conducted by a partnership in which that person
is a partner and the business conducted by
persons connected to such person shall be deemed
to be conducted by such person. A person shall
be connected to another if one owns, directly or
indirectly, at least 50 per cent of the
beneficial interests in the other (or, in the
case of a company, at least 50 per cent of the
voting power of the company) or another person
owns, directly or indirectly, at least 50 per
cent of the beneficial interests (or, in the case
of a company, at least 50 per cent of the voting
power of the company) in each person. In any
case, a person shall be considered to be
connected to another if, on the basis of all the
facts and circumstances, one has control of the
other or both are under the control of the same
person or persons.
5.
A resident of a Contracting State that is neither a
qualified person nor entitled under paragraph 4 to the
benefits granted by the provisions of paragraph 3 of
Article 11 or Article 13 with respect to an item of income
described in those paragraphs or Articles, or is a company
that is not entitled to the benefits of paragraph 3 of
Article 10 because the company does not meet the
requirements of subparagraphs (a) or (b) of paragraph 3 of
Article 10, shall nevertheless be granted such benefits if
the competent authority of the other Contracting State
determines, in accordance with its domestic law or
administrative practice, that the establishment,
acquisition or maintenance of such resident and the conduct
of its operations are considered as not having the
obtaining of such benefits as one of the principal
purposes.
6.
For the purposes of this Article:

(a)
the term qualified governmental entity means

the Government of a Contracting State, any
political subdivision or local authority thereof,
the Bank of Japan, the Reserve Bank of New
Zealand or a person that is wholly owned,
directly or indirectly, by the Government of a
Contracting State or a political subdivision or
local authority thereof;
(b)
the term principal class of shares means the

class or classes of shares of a company which
represent a majority of the voting power of the
company;
(c)
the term recognised stock exchange means:
(d)
(i)
any stock exchange established by a

Financial Instruments Exchange or an
approved-type financial instruments firms
association under the terms of the Financial
Instruments and Exchange Law (Law No. 25 of
1948) of Japan;
(ii)
the securities markets (other than the New

Zealand Debt Market) operated by the New
Zealand Exchange Limited and any other New
Zealand securities exchange recognised under
the laws of New Zealand; and
(iii)
any other stock exchange which the competent

authorities of the Contracting States agree
to recognise for the purposes of this
Article; and
the term pension fund means any person that:

(i)
(ii)
is established under the law of a

is operated principally to administer or
provide pensions, retirement benefits or
other similar remuneration or to earn income
for the benefit of other pension funds.
Article 23
LIMITATION OF RELIEF
No relief shall be available under this Convention if

it was the main purpose of any person concerned with the
creation or assignment of any right or property in respect
of which the income is paid or derived to take advantage of
the Convention by means of that creation or assignment.
Article 24
ELIMINATION OF DOUBLE TAXATION
1.
Subject to the provisions of the laws of Japan
regarding the allowance as a credit against Japanese tax of
tax payable in any country other than Japan, where a
resident of Japan derives income from New Zealand which may
be taxed in New Zealand in accordance with the provisions
of this Convention, the amount of New Zealand tax payable
in respect of that income shall be allowed as a credit
against the Japanese tax imposed on that resident. The
amount of credit, however, shall not exceed that part of
the Japanese tax which is appropriate to that income.
2.
Subject to the provisions of the laws of New Zealand
which relate to the allowance of a credit against New
Zealand tax of tax paid in a country outside New Zealand
(which shall not affect the general principle of this
Article), Japanese tax paid under the laws of Japan and
consistent with this Convention, in respect of income
derived by a resident of New Zealand from sources in Japan
(excluding, in the case of a dividend, tax paid in respect
of the profits out of which the dividend is paid) shall be
allowed as a credit against New Zealand tax payable in
respect of that income.
Article 25
NON-DISCRIMINATION
1.
Nationals of a Contracting State shall not be
subjected in the other Contracting State to any taxation or
any requirement connected therewith, which is other or more
burdensome than the taxation and connected requirements to
which nationals of that other Contracting State in the same
circumstances, in particular with respect to residence, are
or may be subjected. The provisions of this paragraph
shall, notwithstanding the provisions of Article 1, also
apply to persons who are not residents of one or both of
the Contracting States.
2.
The taxation on a permanent establishment which an
enterprise of a Contracting State has in the other
Contracting State shall not be less favourably levied in
that other Contracting State than the taxation levied on
enterprises of that other Contracting State carrying on the
same activities in similar circumstances. The provisions
of this paragraph shall not be construed as obliging a
Contracting State to grant to individuals who are residents
of the other Contracting State any personal allowances,
reliefs and reductions for taxation purposes on account of
civil status or family responsibilities which it grants to
its own residents.
3.
Except where the provisions of paragraph 1 of Article
9, paragraph 9 of Article 11 or paragraph 6 of Article 12
apply, interest, royalties and other disbursements paid by
an enterprise of a Contracting State to a resident of the
other Contracting State shall, for the purposes of
determining the taxable profits of such enterprise, be
deductible under the same conditions as if they had been
paid to a resident of the first-mentioned Contracting
State.
4.
Enterprises of a Contracting State, the capital of
which is wholly or partly owned or controlled, directly or
indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the firstmentioned Contracting State to any taxation or any
requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to
which other similar enterprises of the first-mentioned
Contracting State in similar circumstances are or may be
subjected.
5.
The provisions of this Article shall, notwithstanding
the provisions of Article 2, apply to taxes of every kind
and description imposed by a Contracting State or a
political subdivision or local authority thereof.
Article 26
MUTUAL AGREEMENT PROCEDURE
1.
Where a person considers that the actions of one or
both of the Contracting States result or will result for
that person in taxation not in accordance with the
provisions of this Convention, that person may,
irrespective of the remedies provided by the domestic law
of those Contracting States, present a case to the
competent authority of the Contracting State of which the
person is a resident or, if that persons case comes under
paragraph 1 of Article 25, to that of the Contracting State
of which that person is a national. The case must be
presented within three years from the first notification of
the action resulting in taxation not in accordance with the
provisions of the Convention.
2.
The competent authority shall endeavour, if the
objection appears to it to be justified and if it is not
itself able to arrive at a satisfactory solution, to
resolve the case by mutual agreement with the competent
authority of the other Contracting State, with a view to
the avoidance of taxation which is not in accordance with
the provisions of this Convention. Any agreement reached
shall be implemented notwithstanding any time limits in the
domestic law of the Contracting States.
3.
The competent authorities of the Contracting States
shall endeavour to resolve by mutual agreement any
difficulties or doubts arising as to the interpretation or
application of this Convention. They may also consult
together for the elimination of double taxation in cases
not provided for in the Convention.
4.
may communicate with each other directly, including through
a joint commission consisting of themselves or their
representatives, for the purpose of reaching an agreement
in the sense of the preceding paragraphs of this Article.
5.
Where,
(a)
under paragraph 1, a person has presented a case

to the competent authority of a Contracting State
on the basis that the actions of one or both of
the Contracting States have resulted for that
person in taxation not in accordance with the
provisions of this Convention, and
(b)
the competent authorities are unable to reach an

agreement to resolve that case pursuant to
paragraph 2 within two years from the
presentation of the case to the competent
authority of the other Contracting State,
any unresolved issues arising from the case shall be

submitted to arbitration if the person so requests. These
unresolved issues shall not, however, be submitted to
arbitration if a decision on these issues has already been
rendered by a court or administrative tribunal of either
Contracting State. Unless a person directly affected by
the case does not accept the mutual agreement that
implements the arbitration decision, that decision shall be
binding on both Contracting States and shall be implemented
notwithstanding any time limits in the domestic laws of
these Contracting States. The competent authorities of the
Contracting States shall by mutual agreement settle the
mode of application of this paragraph.
Article 27
EXCHANGE OF INFORMATION
1.
shall exchange such information as is foreseeably relevant
for carrying out the provisions of this Convention or to
the administration or enforcement of the domestic laws
concerning taxes of every kind and description imposed on
behalf of the Contracting States, or of their political
subdivisions or local authorities, insofar as the taxation
thereunder is not contrary to the Convention. The exchange
of information is not restricted by Articles 1 and 2.
2.
Any information received under paragraph 1 by a
Contracting State shall be treated as secret in the same
manner as information obtained under the domestic laws of
that Contracting State and shall be disclosed only to
persons or authorities (including courts and administrative
bodies) concerned with the assessment or collection of, the
enforcement or prosecution in respect of, the determination
of appeals in relation to the taxes referred to in
paragraph 1, or the oversight of the above. Such persons
or authorities shall use the information only for such
purposes. They may disclose the information in public
court proceedings or in judicial decisions.
3.
In no case shall the provisions of paragraphs 1 and 2
be construed so as to impose on a Contracting State the
obligation:
(a)
to carry out administrative measures at variance

with the laws and administrative practice of that
or of the other Contracting State;
(b)
to supply information which is not obtainable

under the laws or in the normal course of the
administration of that or of the other
Contracting State;
(c)
to supply information which would disclose any

trade, business, industrial, commercial or
professional secret or trade process, or
information, the disclosure of which would be
contrary to public policy.
4.
If information is requested by a Contracting State in
accordance with this Article, the other Contracting State
shall use its information gathering measures to obtain the
requested information, even though that other Contracting
State may not need such information for its own tax
purposes. The obligation contained in the preceding
sentence is subject to the limitations of paragraph 3 but
in no case shall such limitations be construed to permit a
Contracting State to decline to supply information solely
because it has no domestic interest in such information.
5.
In no case shall the provisions of paragraph 3 be
construed to permit a Contracting State to decline to
supply information solely because the information is held
by a bank, other financial institution, nominee or person
acting in an agency or a fiduciary capacity or because it
relates to ownership interests in a person.
Article 28
ASSISTANCE IN THE COLLECTION OF TAXES
1.
The Contracting States shall lend assistance to each
other in the collection of revenue claims. This assistance
is not restricted by Articles 1 and 2.
2.
The term revenue claim as used in this Article means
an amount owed in respect of the taxes covered by Article 2
and in addition, the following taxes imposed by the
Contracting States, insofar as the taxation thereunder is
not contrary to this Convention or any other instrument to
which the Contracting States are parties, as well as
interest, administrative penalties and costs of collection
or conservancy related to such amount:
(a)

(i)
(ii)
(iii)
(b)
the consumption tax;

the inheritance tax; and
the gift tax;

the goods and services tax.
3.
When a revenue claim of a Contracting State is
enforceable under the laws of that Contracting State and is
owed by a person who, at that time, cannot, under the laws
of that Contracting State, prevent its collection, that
revenue claim shall, at the request of the competent
authority of that Contracting State, be accepted for
purposes of collection by the competent authority of the
other Contracting State. That revenue claim shall be
collected by that other Contracting State in accordance
with the provisions of its laws applicable to the
enforcement and collection of its own taxes as if the
revenue claim were a revenue claim of that other
Contracting State that met the conditions allowing that
other Contracting State to make a request under this
paragraph.
4.
When a revenue claim of a Contracting State is a claim
in respect of which that Contracting State may, under its
law, take measures of conservancy with a view to ensure its
collection, that revenue claim shall, at the request of the
competent authority of that Contracting State, be accepted
for purposes of taking measures of conservancy by the
competent authority of the other Contracting State. That
other Contracting State shall take measures of conservancy
in respect of that revenue claim in accordance with the
provisions of its laws as if the revenue claim were a
revenue claim of that other Contracting State even if, at
the time when such measures are applied, the revenue claim
is not enforceable in the first-mentioned Contracting State
or is owed by a person who has a right to prevent its
collection.
5.
a revenue claim accepted by a Contracting State for
purposes of paragraph 3 or 4 shall not, in that Contracting
State, be subject to the time limits or accorded any
priority applicable to a revenue claim under the laws of
that Contracting State by reason of its nature as such. In
addition, a revenue claim accepted by a Contracting State
for the purposes of paragraph 3 or 4 shall not, in that
Contracting State, have any priority applicable to that
revenue claim under the laws of the other Contracting
State.
6.
Notwithstanding the provisions of paragraph 5, acts
carried out by a Contracting State in the collection of a
revenue claim accepted by that Contracting State for
purposes of paragraph 3 or 4, which, if they were carried
out by the other Contracting State, would have the effect
of suspending or interrupting the time limits applicable to
the revenue claim according to the laws of that other
Contracting State, shall have such effect under the laws of
that other Contracting State. The first-mentioned
Contracting State shall inform the other Contracting State
about such acts.
7.
Proceedings with respect to the existence, validity or
the amount of a revenue claim of a Contracting State shall
not be brought before the courts or administrative bodies
of the other Contracting State.
8.
Where, at any time after a request has been made by a
Contracting State under paragraph 3 or 4 and before the
other Contracting State has collected and remitted the
relevant revenue claim to the first-mentioned Contracting
State, the relevant revenue claim ceases to be
(a)
in the case of a request under paragraph 3, a

revenue claim of the first-mentioned Contracting
State that is enforceable under the laws of that
Contracting State and is owed by a person who, at
that time, cannot, under the laws of that
Contracting State, prevent its collection, or
(b)
in the case of a request under paragraph 4, a

revenue claim of the first-mentioned Contracting
State in respect of which that Contracting State
may, under its laws, take measures of conservancy
with a view to ensure its collection
the competent authority of the first-mentioned Contracting

State shall promptly notify the competent authority of the
other Contracting State of that fact and, at the option of
the other Contracting State, the first-mentioned
Contracting State shall either suspend or withdraw its
request.
9.
In no case shall the provisions of this Article be
construed so as to impose on a Contracting State the
obligation:
(a)
to carry out administrative measures at variance

with the laws and administrative practice of that
or of the other Contracting State;
(b)
to carry out measures which would be contrary to

public policy;
(c)
to provide assistance if the other Contracting

State has not pursued all reasonable measures of
collection or conservancy, as the case may be,
available under its laws or administrative
practice;
(d)
to provide assistance in those cases where the

administrative burden for that Contracting State
is clearly disproportionate to the benefit to be
derived by the other Contracting State.
10. Before assistance is lent under the provisions of this

Article, the competent authorities of both Contracting
States shall agree upon the mode of application of this
Article, including an agreement to ensure comparable levels
of assistance to each of the Contracting States. In
particular, the competent authorities of both Contracting
States shall agree on a limit to the number of applications
for assistance that a Contracting State may make in a
particular year, as well as a minimum monetary threshold
for a revenue claim for which assistance is sought, and
procedural rules related to the remittance of amounts
collected pursuant to the provisions of this Article.
Article 29
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS
Nothing in this Convention shall affect the fiscal
privileges of members of diplomatic missions or consular
posts under the general rules of international law or under
the provisions of special agreements.
Article 30
HEADINGS
The headings of the Articles of this Convention are
inserted for convenience of reference only and shall not
affect the interpretation of the Convention.
Article 31
ENTRY INTO FORCE
1.
This Convention shall be approved in accordance with
the legal procedures of each of the Contracting States and
shall enter into force on the thirtieth day after the date
of exchange of diplomatic notes indicating such approval.
2.
This Convention shall be applicable:

(a)

(i)
(ii)
(iii)
(b)
with respect to taxes on income withheld at

source, for amounts taxable on or after 1
January in the calendar year next following
that in which the Convention enters into
force;
with respect to taxes on income which are
not withheld at source, as regards income
for any taxable year beginning on or after 1
that in which the Convention enters into
force; and
with respect to other taxes, as regards
taxes for any taxable year beginning on or
after 1 January in the calendar year next
following that in which the Convention
enters into force; and

(i)

source, for amounts paid or credited on or
enters into force;
(ii)

not withheld at source, for any income year
beginning on or after 1 April next following
the date on which the Convention enters into
force; and
(iii)

taxes for any taxable period beginning on or
enters into force.
3.
The Convention between Japan and New Zealand for the
Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income signed at
Wellington on 30 January, 1963, as amended by the Protocol
signed at Wellington on 22 March, 1967 (hereinafter in this
Article referred to as the prior Convention) shall cease
to be applicable from the date upon which this Convention
applies in respect of the taxes to which the Convention
applies in accordance with the provisions of paragraph 2 of
this Article.
4.
The prior Convention shall terminate on the last date
on which it applies in accordance with the provisions of
the preceding paragraphs of this Article.
Article 32
TERMINATION
This Convention shall remain in force until terminated
by a Contracting State. Either Contracting State may
terminate the Convention, through diplomatic channels, by
giving notice of termination at least six months before the
end of any calendar year beginning after the expiry of five
years from the date of entry into force of the Convention.
In such event, the Convention shall cease to have effect:
(a)

(i)
(b)

source, for amounts taxable on or after 1
that in which the notice is given;
(ii)

not withheld at source, as regards income
for any taxable year beginning on or after 1
that in which the notice is given; and
(iii)

taxes for any taxable year beginning on or
following that in which the notice is given;
and

(i)

source, for amounts paid or credited on or
following that in which the notice is given;
(ii)
(iii)

not withheld at source, for any income year
beginning on or after 1 April in the
calendar year next following that in which
the notice of termination is given; and
taxes for any taxable period beginning on or
following that in which the notice is given.
IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, have
signed this Convention.
DONE in duplicate at Tokyo this tenth day of December,
2012, in the Japanese and English languages, both texts
being equally authentic.
FOR JAPAN
FOR NEW ZEALAND

Mark Sinclair
Protocol
At the signing of the Convention between Japan and New

Zealand for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on
Income (hereinafter referred to as the Convention), Japan
and New Zealand have agreed upon the following provisions,
which shall form an integral part of the Convention:
1.
It is understood that:
(a)
Except to the extent provided

(b), the Convention shall not
by a Contracting State of its
determined under Article 4 of
in subparagraph
affect the taxation
residents (as
the Convention).
(b)
The provisions of subparagraph (a) shall not

affect the benefits conferred by a Contracting
State under the Convention in accordance with
paragraphs 2 and 3 of Article 9, and Articles 18,
19, 24, 25, 26 and 29 of the Convention.
2.
With reference to paragraphs 1 and 2 of Article 2 of
the Convention:
The term Japanese tax or New Zealand tax shall not
include any amount which represents a penalty or interest
imposed under the laws of Japan or New Zealand,
respectively, relating to the taxes to which the Convention
applies.
3.
With reference to paragraph 3 of Article 4 of the
Convention:
It is understood that the term any other relevant
factors includes:
(a)
where the senior day-to-day management is carried

on;
(b)
which Contracting States law governs the legal

status;
(c)
where the accounting records are held; and
(d)
where business is carried on.
4.
Convention:
(a)
It is understood that an enterprise of a

Contracting State shall not be considered to
operate equipment in the other Contracting State
where the enterprise leases equipment under a
lease contract that is solely for the provision
of equipment, including a bareboat lease
contract.
(b)
It is understood that the factors of size,

quantity or value of equipment or the role of
equipment in income producing activities are
relevant in determining whether the equipment is
substantial on the basis of the facts and
circumstances of each particular case.
(c)
It is understood that the term substantial

equipment may include oil or drilling rigs,
platforms and other structures used in the
petroleum or mining industry.
5.
With reference to subparagraph (a) of paragraph 6 of
Article 7 of the Convention:
It is understood that in the case of Japan the term "a
trust which is treated as a company for tax purposes" means
a trust, the trustee of which is subject to tax in respect
of profits derived from business carried on by the use of
trust estate.
6.
With reference to Articles 10, 11 and 12 of the
Convention:
It is understood that in determining, for the purposes
of those Articles, whether dividends, interest or royalties
are beneficially owned by a resident of New Zealand:
(a)
dividends, interest or royalties arising in Japan

in respect of which a trustee who is a resident
of New Zealand is subject to tax in New Zealand;
or
(b)
dividends arising in Japan in respect of which a

trustee who is a resident of New Zealand would be
subject to tax in New Zealand but for an
application of an exemption that applies
generally to those dividends under the law of New
Zealand,
shall be treated as being beneficially owned by that

trustee.
7.
Convention:
If, in any future tax treaty with any other state, New
Zealand should provide more favourable treatment of
dividends with respect to the relevant conditions, New
Zealand shall without undue delay inform Japan and shall
enter into negotiations with Japan with a view to providing
the same treatment.
8.
Convention:
It is understood that the term dividends includes,
in the case of New Zealand, income in relation to profitrelated debentures, substituting debentures and stapled
debt securities as defined in sections FA 2 and FA 2B of
the Income Tax Act 2007 or any substantially similar
provision which is enacted and has effect after the date of
signature of the Convention.
9.
With reference to paragraph 3 and 4 of Article 11 of
the Convention:
It is understood that the New Zealand Export Credit
Office is a part of the Government of New Zealand.
10. With reference to paragraph 5 of Article 11 of the
Convention:
It is understood that the term arrangement involving
back-to-back loans would cover, inter alia, any kind of
arrangement structured in such a way that a financial
institution which is a resident of a Contracting State
receives interest arising in the other Contracting State
and the financial institution pays an equivalent interest
to another person who is a resident of the first-mentioned
Contracting State and, if it received the interest directly
from the other Contracting State, would not be entitled to
the exemption from tax with respect to that interest in
11.
With reference to Article 11 of the Convention:
If, in any future tax treaty with any other state, New
Zealand should provide more favourable treatment of
interest derived by financial institutions, New Zealand
shall without undue delay inform Japan and shall enter into
negotiations with Japan with a view to providing the same
treatment.
12. With reference to Articles 11, 12 and 14 of the

Convention:
The reference to the term borne by is also
applicable to interest, royalties or remuneration that is
deductible in determining the profits attributable to a
permanent establishment.
13. With reference to subparagraph (d) of paragraph 3 of
Article 12 of the Convention:
It is understood that the term forbearance in respect
of the use or supply of any property or right applies to
cases where the holder of any property or right receives a
payment as consideration for not making such property or
right available to another person.
14.
It is understood that paragraph 1 of Article 13 of the

Convention shall apply to income, profits or gains derived
by a resident of a Contracting State from the alienation of
the interests in a partnership or trust to the extent that
the income, profits or gains is treated for the purposes of
the taxation laws of the other Contracting State as the
income, profits or gains derived from the alienation of
immovable property referred to in Article 6 of the
Convention situated in that other Contracting State.
15.
It is confirmed that the provisions of Article 25 of

the Convention shall not affect the provisions of the
taxation laws of New Zealand concerning:
(a)
Subpart FE of the Income Tax Act 2007 which deals

with thin capitalisation;
(b)
Section CW 10 of the Income Tax Act 2007 which

deals with an inter-corporate dividend exemption
for wholly-owned groups;
(c)
Subpart FM of the Income Tax Act 2007 which deals

with consolidated groups;
(d)
Section EB 5 of the Income Tax Act 2007 which

deals with transfers of trading stock within a
wholly-owned group;
(e)
Subpart IC of the Income Tax Act 2007 which deals

with loss offsets between group companies;
(f)
Subpart FO of the Income Tax Act 2007 which deals

with amalgamation of companies; and
(g)
Any provision adopted after the date of signature

of the Convention which is substantially similar
in purpose or intent to a provision covered by
this paragraph, or is otherwise agreed between
the Governments of the Contracting States through
an exchange of diplomatic notes,
provided that any such provision does not allow for

different treatment of residents of Japan as compared with
the treatment of residents of any third state.
Convention:
(a)
The competent authorities shall by mutual

agreement establish a procedure in order to
ensure that an arbitration decision will be
implemented within two years from a request for
arbitration as referred to in paragraph 5 of
Article 26 of the Convention unless actions or
inaction of a person directly affected by the
case presented pursuant to that paragraph hinder
the resolution of the case or unless the
competent authorities and that person agree
otherwise.
(b)
An arbitration panel shall be established in

accordance with the following rules:
(i)
(ii)
An arbitration panel shall consist of three

arbitrators with expertise or experience in
international tax matters.
Each competent authority shall appoint one
arbitrator. The two arbitrators appointed
by the competent authorities shall appoint
the third arbitrator who serves as the chair
of the arbitration panel in accordance with
the procedures agreed by the competent
authorities.
(iii)
All arbitrators shall not be employees of

the tax authorities of the Contracting
States, nor have had dealt with the case
presented pursuant to paragraph 1 of Article
26 of the Convention in any capacity.
Unless otherwise agreed by the competent
authorities of the Contracting States, the
third arbitrator shall not be a national of
either Contracting State, nor have had the
arbitrators usual place of residence in
either Contracting State, nor have been
employed by either Contracting State.
(iv)
The competent authorities shall ensure that

all arbitrators and their staff agree, in
statements sent to each competent authority,
prior to their acting in an arbitration
proceeding, to abide by and be subject to
the same confidentiality and non-disclosure
obligations described in paragraph 2 of
Article 27 of the Convention and in the
applicable domestic laws of the Contracting
States.
(v)
Each competent authority shall bear the cost

of its appointed arbitrator and its own
expenses. The cost of the chair of an
arbitration panel and other expenses
associated with the conduct of the
proceedings shall be borne by the competent
authorities in equal shares.
(c)
The competent authorities shall provide the

information necessary for the arbitration
decision to all arbitrators and their staff
without undue delay.
(d)
An arbitration decision shall be treated as

follows:
(i)
An arbitration decision has no formal

precedential value.
(ii)
(e)
An arbitration decision shall be final,

unless that decision is found to be
unenforceable by the courts of one of the
Contracting States due to a violation of
paragraph 5 of Article 26 of the Convention,
of this paragraph or of any procedural rule
determined in accordance with subparagraph
(a) of this paragraph that may reasonably
have affected the decision. If the decision
is found to be unenforceable due to the
violation, the decision shall be considered
not to have been made.
Where, at any time after a request for

arbitration has been made and before the
arbitration panel has delivered a decision to the
competent authorities and the person who made the
request for arbitration, the competent
authorities have solved all the unresolved issues
submitted to the arbitration, the case shall be
considered as resolved pursuant to paragraph 2 of
Article 26 of the Convention and no arbitration
decision shall be provided.

Convention:
It is understood that a Contracting State may decline
to supply information relating to confidential
communications between attorneys, solicitors or other
admitted legal representatives in their role as such and
their clients to the extent that the communications are
protected from disclosure under the domestic law of that
Contracting State.
18.

(a)
It is understood that in the case of New Zealand

the collection of a revenue claim is subject to
Part 10A of the Tax Administration Act 1994 or
any legislation which replaces those provisions
after the date of signature of the Convention.
(b)
In no case shall the provisions of Article 28 of

the Convention be construed so as to allow a
Contracting State to request assistance from the
other Contracting State in the collection of a
revenue claim with respect to which the firstmentioned Contracting State would not be able to
provide such assistance under the laws or in the
normal course of administrative practices of the
first-mentioned Contracting State if the request
for such assistance were made to the firstmentioned Contracting State.
IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, have
signed this Protocol.
DONE in duplicate at Tokyo this tenth day of December,
2012, in the Japanese and English languages, both texts
being equally authentic.
FOR JAPAN
FOR NEW ZEALAND

Mark Sinclair

DTC Agreement Between Japan and New Zealand

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CONVENTION BETWEEN

JAPAN AND NEW ZEALAND

Japan and New Zealand,

The taxes to which this Convention shall apply are:

in the case of Japan:

the income tax;

(hereinafter referred to as Japanese tax); and

in the case of New Zealand:

the term Japan, when used in a geographical

the term New Zealand means the territory of New

the terms a Contracting State and the other

the term tax means Japanese tax or New Zealand

the term person includes an individual, a

the term company means any body corporate or

the term enterprise applies to the carrying on

the terms enterprise of a Contracting State and

the term international traffic means any

the term national, in relation to a Contracting

any individual possessing the nationality or

any legal person, partnership or association

the term competent authority means:

in the case of Japan, the Minister of

the term business includes the performance of

in the case of Japan, any person who, under the

in the case of New Zealand, any person who, under

The Government of a Contracting State or a political

the individual shall be deemed to be a resident

if the Contracting State in which the

if the individual has an habitual abode in both

if the individual is a national of both

Where under this Convention any income is

Where under this Convention any income is

For the purposes of applying this Convention:

derived from a Contracting State through an

shall be eligible for the benefits of the

derived from a Contracting State through an

shall be eligible for the benefits of the

derived from a Contracting State through an

treated as the income of the beneficiaries,

shall be eligible for the benefits of the

derived from a Contracting State through an

treated as the income of that entity under

shall not be eligible for the benefits of the

derived from a Contracting State through an

shall not be eligible for the benefits of the

a mine, an oil or gas well, a quarry or any other

through an individual who is present in that

for a period or periods exceeding in the

the activities carried on in that other Contracting State

The duration of activities under paragraphs 3, 4

The period during which two or more associated

For the purposes of this Article, an enterprise

an enterprise participates directly or

the same persons participate directly or

the use of facilities solely for the purpose of

the maintenance of a stock of goods or

the maintenance of a stock of goods or

the maintenance of a fixed place of business

the maintenance of a fixed place of business

the maintenance of a fixed place of business

has, and habitually exercises, in a Contracting

manufactures or processes in a Contracting State

that enterprise shall be deemed to have a permanent